Cosatu in talks with government to fund Eskom using pensions

The Congress of South African Trade Unions, the country’s biggest labour federation, said significant progress was made on Wednesday in its talks with government and business over its proposed plan to cut Eskom Holdings SOC Ltd.’s debt.

“There were broad in-principle agreements,” said Matthew Parks, Cosatu’s parliamentary coordinator, in an interview. There was an agreement “there needs to be a big bang intervention,” he said, adding that that applied to other areas of the economy as well as Eskom.

Cosatu has proposed that Eskom’s debt be cut to 200 billion rand ($13.5 billion) from its current level of about 454 billion rand by using funds from state-development institutions and the Public Investment Corp., which oversees 2.13 trillion rand of mainly government worker pensions.

The discussions are ongoing and it is hoped that there will be sufficient agreement for President Cyril Ramaphosa to make an announcement in his state-of-the-nation address on Feb. 13, Parks said.

While the modalities of the debt relief still need to be worked out and there are differences of opinion on some matters, Parks said he was confident that “we will find each other.”

Members of cabinet including Finance Minister Tito Mboweni, Trade and Industry Minister Ebrahim Patel, Public Enterprises Minister Pravin Gordhan and Labor Minister Thulas Nxesi also attended the talks in Johannesburg, Parks said.

Cosatu has also proposed that a discussion begin on the use of money from private pension funds to fund state infrastructure. The main business lobby group has said that any such development must ensure that fund mandates are not compromised and the same applies to the fiduciary duty of trustees.

The discussion over so-called prescribed assets had “become an ugly, polarizing debate and that’s so unnecessary,” Parks said.

Now read: Eskom load-shedding – What to expect this weekend

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Cosatu in talks with government to fund Eskom using pensions